By RANDY SEAVER, Editor
The city of Biddeford is now facing roughly $500,000 in penalties and fines from the Internal Revenue Service (IRS).
According to City Manager Truc Dever, the issue traces back to 2021 when the city failed to submit specific forms detailing employee health insurance.
“Initially, the fines and penalties were approximately $700,000,” Dever told the city council during last week’s meeting.
Dever said the city already paid the IRS roughly $200,000 in fines. She also said that the city is working closely with staffers in U.S. Senator Susan Collins’ office to help rectify the issue.
Dever told the council that she is expecting an answer from the IRS sometime before March.
The issue first came to light in 2024, and several councilors asked whether the issue was isolated to just the 2021 incident.
RELATED: City facing significant financial issues, IRS fines
Dever said the fines are incurring compounded interest payments.
Councilor Dylan Doughty asked whether the city could renegotiate the penalty payments and whether they could be spread over a period of time.
“If the IRS determines that there was no harm, no foul – will we get the $200,000 back?” Doughty asked.
Dever said she was not sure how the IRS will proceed.
City Attorney Harry Center told councilors that the IRS determined the city’s penalties by calculating the number of its employees. The city has roughly 700 employees, he said.
Mayor Liam LaFountain asked Dever if the city could be facing other penalties for different tax years and whether processes have been put in place to prevent the situation from happening again sometime in the future.
Dever told the mayor that the issue was contained to the 2021 filing and that the city is monitoring and updating all of its tax and federal filing obligations.
__________
Randy Seaver is the editor and founder of the Biddeford Gazette. He may be reached by email: randy@randyseaver.com
c.) 2026 All Rights Reserved
Never miss another update! Subscribe for free today!
THE BIDDEFORD GAZETTE 
One thought on “City facing $500k in IRS penalties, fines”